'The fox knows many things…'

i3 Podcast Ep 13: Mike Aked

My conversation with Mike Aked, who has just established the first Australian office for Research Affiliates in Melbourne. Mike speaks about the reasons behind coming down under, asset allocation issues and responds to criticism from quant investors on the CAPE ratio. He also discusses the importance of simplicity over complexity.

There is a great discussion around 30min in on how to estimate long-term investment returns.

Outline

5:00 Cultural differences in investing
8:00 Working with Gary Brinson
14:00 Create a resolve during good times as a buffer for bad times
18:30 Why copy the endowment model?
20:00 Avoid the bankruptcy of the decision-making process
23:00 Is a strategic asset allocation a useful tool?
30:00 Whatever you do it won’t be perfect.
35:00 Research Affiliates to release more short term views
38:30 In positive climate, more momentum; in negative more value
41:00 On sizing positions
46:00 CAPE ratio and its criticism
53:00 Are factors getting more expensive?
58:00 Simple is not easy; it is a step beyond complexity
59:00 Much of complexity does not add any value
1:05:00 Managers give protection against uncomfortable investing